Wikinvest Wire

U.S. payrolls plunge by 533K in November

Friday, December 05, 2008

The Labor Department reported a decline of 533,000 in nonfarm payrolls during November which, when combined with downward revisions to the data for September and October, totaled 732,000 in newly reported job losses.
IMAGE The September job loss of 284,000 was revised to 403,000 and the October decline of 240,000 was adjusted to 320,000. Interestingly, the September figure was originally reported at 125,000 in October, but was then revised to 284,000 last month, before today's final revision to 403,000 - revisions more than tripled the original count.

The November plunge marked the sharpest decline in payrolls since December 1974, far surpassing the biggest monthly drop during each of the last four recessions:

  • 325,000 in October 2001
  • 306,000 in February 1991
  • 343,000 in July 1982
  • 431,000 in May 1980
Job losses over the last three months now total 1.3 million with the year-to-date figure standing at a whopping 1.9 million.

The unemployment rate, which is calculated using the separate household survey, rose from 6.5 percent in October to 6.7 percent in November, the highest level since October 1993.

Only two payroll categories posted gains for the month - an increase of 52,000 for health and education services along with a 7,000 gain in government jobs. There should be some job losses in state and local governments in the period ahead as an increasing number of budgets are impaired by the economic slowdown.

Elsewhere, the retail sector now appears to be in a virtual free fall. Overall, employment in trade, transportation, and utilities declined by 147,000 with retail trade positions down 91,000. This decline was paced by a net loss of 27,000 jobs at auto dealers and 18,000 positions at clothing stores.
IMAGE Within the professional and business services category, a net loss of 78,000 temporary jobs accounted for the majority of the overall decline of 136,000. Big reductions in temporary help are normally considered a very bad omen for the future of the labor market.

The losses in construction and manufacturing continue, but one sure indication that the National Bureau of Economic Research was correct in finally calling the current period a recession lies within the leisure and hospitality category.

In a sign that people are eating out less and making fewer trips away from home, employment at hotels and motels fell by 37,000 in November and positions at food service and drinking establishments saw a monthly decline of 18,000.

Big declines in these categories only occur during recessions.

This is about as bad as it gets.

5 comments:

Nostradamus, apparently said...

"revisions more than tripled the original count"

I'm not a conspiracy theorist because I believe our 'leaders' are too inept to pull it off.

BUT, how else do you account for what seems to be an almost continuous 'revision' of financial statistics to the bad side?

It seems as if someone is trying to boil the frog VERY slowly in the hopes the frog won't notice and won't jump out of the pot.

For example, how can they be off on the employment figures by 300% and require 2 adjustments to get it right?

And, when the adjustments are made, they almost always get worse?

You'd think that, if there's a delay in data reporting, the delayed data would tend to follow the early data and the adjustments would cut both ways. Statistics and probability tell us that is the case.

I've been watching the government's statistics for a long time and I simply do NOT believe any of them.

That lack of honesty, competence, transparency or whatever is a BIG problem for this country in my book.

I believe many people see this or sense it and simply do NOT trust their government.

CPI figures would be a good example of the ridiculous manipulation and deception engaged in by the government.

Average, working people just don't believe the 'inflation' numbers they hear from the government because they KNOW they bear no relationship to the real world they have to live in every day.

That's a very sad state of affairs and does not bode well for our country.

donna said...

They really played things down in the runup to the election huh? As if people didn't already know how bad things were.

Dan said...

how large do you think the revision will be to the Nov. number.... or will it be negligible as the election has already passed?

Tim said...

Dunno, but they've all be downward for many months now.

John S said...

"This is about as bad as it gets."

Good! If a bit optimistic. As for the numbers: It should be no problem breaking the Dec. 1974 monthly record of around 630,000 jobs lost, the downward revisions to November likely will do that. What's the next benchmark to beat? The employment meltdown of 1931?

My fear is this is only just getting started.

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